Businesses Frown Upon EBT Fees

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The change in law regarding the electronic benefit transfer, or EBT, includes an additional charge for transaction fee on businesses. The revelation serves as an alarming sign for many businesses as additional costs for businesses mean that their margin for revenue will reduce.

The new proposition, by default, stipulates transaction fees on businesses and reduce in benefits.

Smaller-scale liquor stores, markets and convenience stores have actively agreed to accept EBTs in an organized effort to help the low-income community, but levying an additional transaction charge could start driving many businesses away.

“We get more than 20 customers who pay for their items with EBTs,” said John Lee, who runs Koreatown’s Apollo Market. “Many of them are from low-income households or are physically disabled. It’s simply not right to say that food stamps are helping business owners.”

Lee then added that he has not charged customers paying with EBTs additionally for envelopes or transaction fees. In other words, Lee has stressed that accepting EBTs do not help him grow his margin of revenue.

“The government started charging transaction fees on business owners instead of the bank from two to three years ago,” said James Kim, who is running a supermarket in Hawthorne.

“There is no minimum charge on food stamps, so the business owners will still have to pay a transaction fee even for a $1 transaction. We get about 300 to 400 customers paying with food stamps and the transaction fee is about $0.10 to $0.20. That’s not a huge amount, but it could be problematic in the long run. If the new law passes, I’m going to consider if we’ll continue to accept food stamps from customers.”

Korean American Grocers Association of California president Jung-chil Kim said: “We’re being asked to provide a solution from Korean business owners who are frustrated about the proposed new law. There is not much we can do at the moment as the proposition is currently being considered.”

Kim added that his organization could start a petition to stand against the changing law regarding EBT.

By Hyunwook Chung